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6 July 2026

AI And Attorney-Client Privilege: What Employers Should Know

MF
Masuda, Funai, Eifert & Mitchell, Ltd.

Contributor

Since its founding in 1929, Masuda Funai has focused its practice on successfully representing international and domestic companies entering, operating and expanding in the United States. With offices in Chicago, Schaumburg and Los Angeles, the firm assists clients in every aspect of business, including establishing, acquiring, financing and selling operations and facilities; transferring overseas employees to the U.S.
A federal court ruling examines whether attorney-client privilege and work-product protections extend to materials created when a criminal defendant independently used a consumer AI platform to analyze confidential attorney discussions and generate defense strategy reports. The decision addresses critical questions about privilege waiver when clients share attorney communications with third-party AI tools that lack robust confidentiality safeguards.
United States Litigation, Mediation & Arbitration
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A recent ruling in United States v. Heppner, addressed the application of the attorney-client privilege and the work-product doctrine to materials generated by a client using a consumer-grade generative Artificial Intelligence (AI) tool, without direction of an attorney. In Heppner, a criminal defendant input information, which included private and confidential discussions with his attorney, into the AI platform, Claude. He intended to prepare reports outlining defense strategies and potential arguments. He later shared these AI generated reports with his attorney. The Heppner Court ruled that the output from the AI tool was neither protected by the attorney-client privilege nor the work-product doctrine because the input loaded into Claude and Claude’s output was not an exchange between a client and his attorney. Further, the defendant did not maintain confidentiality, because Claude’s privacy policy clearly stated that a user’s data and prompts will be used for model training and disclosed to third parties. The defendant had waived any existing privilege because he voluntarily disclosed discussions with his attorney to a third party (i.e., the AI platform). Likewise, the Court ruled that the work-product doctrine also did not apply because the materials were not generated at an attorney’s direction and did not disclose an attorney’s legal strategy or mental impressions.

Establishing and enforcing a robust AI policy is highly recommended as the best way for employers to preserve attorney-client privilege and protect work-product in this AI era. Employers should only use AI platforms that have been formally vetted by their legal and IT departments. Enterprise AI versions may be the preferable choice because they typically include "opt-out" clauses for data training and other stricter data isolation protocols. Because AI use by employers is now regulated in certain states (including Illinois), it is always best to consult with counsel first.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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